1. Removes Middle Man in a Current Process
Essentially one of the most important concepts of Blockchain technology is that it aims to cut out a middle man in a current process. We need that trust when facilitating transactions between parties and for that we pay a premium.
But now comes the Blockchain that allows us to transact with each other without that middle man taking his cut. That trust is baked into the technology.
So does it make sense then why there are so many project teams coming into this space with profit and revenue generation models for themselves?
“Same Same but different”
Most ICO projects out there are just aiming to replace one middle man with themselves. Instead of the current someone taking high fees on a process they claim to make a process cheaper by taking a smaller cut.
Visa takes a 3% cut from merchants whenever you use your credit card to make a purchase. But instead of the Visa network should we use a blockchain payments network instead because they will charge 2%? Visa does a fair bit for that 3% such as providing support, protection against fraud and misuse. What will another Blockchain payments network offer me instead? I’m not waiting 20–30 mins for my payment to go through when I buy something on my credit card. It takes seconds then I am on my way. For me to benefit, a Blockchain solution should remove most of that 3% fee so that the merchant can sell me the goods for cheaper.
A Blockchain payments network is NOT useless. But how a Blockchain payment network should be implemented is to not allow for a central entity to profit at all. The participants in the network should be the consumers and merchants together with the network validators. The beauty of blockchain is that the consumer and merchant can be the network validators if they so choose, thereby all benefiting.
Be very wary of centralised entities claiming to revolutionise an industry but really just replacing one entity with themselves.
Crypto Exchanges are great businesses for generating millions in revenue and getting you to Unicorn status. But don’t be confused that they are here to revolutionise the industry for the transferring of digital assets. Be careful of the Exchange Token that promises some kind of revenue sharing. Most of the Tokens will be held by the exchange themselves. Instead wait till we see the next version Decentralised Exchanges.
This is why I love Bitcoin. Bitcoin is a store of value that completely 100% removes the middle man. There is no other way you can store value as efficiently as Bitcoin without a third party taking a fee from providing custody services. Banks exist because they look after your money. Regardless on if you do something with the money or nothing with it, you will still pay a fee to the bank. With Bitcoin there is no one there taking a cut for you simply owning it.